SECTION 4
4
TAX PAYABLE ON INTEREST ON CERTAIN TREASURY BILLS
The application of section 20 of the
Commonwealth Debt Conversion Act 1931
shall extend to such Commonwealth Treasury Bills issued to banks in Australia, on or after 31 July 1931, as the Australian Loan Council, constituted in pursuance of the Schedule to the
Financial Agreement Validation Act 1929
, determines.

(aa)
deductions allowed or allowable under subsection
78(4) or (5)
of this Act or section
30-15
of the
Income Tax Assessment Act 1997
(the
1997 Act
) because of item 1, 2, 7 or 8 of the table in that section (except deductions allowed or allowable for gifts of property that is trading stock of the taxpayer to which subsection
36(1)
of this Act or section
70-90
of the 1997 Act applies, if the taxpayer has not made, and does not make, an election under subsection
36(3)
or section
36AAA
of this Act, or Subdivision
385-E
of the 1997 Act, in relation to the property); or

(b)
deductions allowed or allowable under section
72
, other than deductions allowed or allowable in respect of rates or land tax incurred in gaining or producing assessable income or necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income.

Definition of ``apportionable deductions'' amended by No 95 of 2004, s 3 and Sch 7 item 11, by substituting ``item 1, 2, 7 or 8'' for ``item 1 or 2'', applicable in relation to contributions made on or after 1 July 2004.

Definition of ``apportionable deductions'' amended by No 121 of 1997, No 18 of 1993, No 107 of 1989, No 168 of 1985, No 47 of 1984, No 108 of 1981, No 117 of 1975, No 126 of 1974 and No 51 of 1973.

assessable incomehas the meaning given by Division
6
of the
Income Tax Assessment Act 1997
.

assessable income from petroleum, in relation to a taxpayer, means assessable income derived by the taxpayer from the sale of petroleum obtained from mining operations carried on by him in Australia or in Papua New Guinea or of the products of petroleum so obtained.

Definition of ``assessable income from petroleum'' amended by No 164 of 1973.

businessincludes any profession, trade, employment, vocation or calling, but does not include occupation as an employee.

child, in relation to a person, includes an adopted child, a step-child or an ex-nuptial child of that person.

Commonwealth countrymeans:

(a)
any of the following countries (other than a country declared by the regulations not to be a Commonwealth country), namely, Barbados, Republic of Botswana, Canada, Ceylon, Republic of Cyprus, Fiji, Republic of The Gambia, Republic of Ghana, Guyana, Republic of India, Jamaica, Republic of Kenya, Kingdom of Lesotho, Republic of Malawi, Malaysia, Malta, Mauritius, Republic of Nauru, New Zealand, Federal Republic of Nigeria, Sierra Leone, Republic of Singapore, Kingdom of Swaziland, United Republic of Tanzania, Independent State of Western Samoa, Kingdom of Tonga, Trinidad and Tobago, Republic of Uganda, United Kingdom of Great Britain and Northern Ireland, Republic of Zambia; and

(b)
any other country declared by the regulations to be a Commonwealth country;

and includes:

(c)
a colony, overseas territory or protectorate of a country that is a Commonwealth country by virtue of paragraph (a) or (b); and

(d)
a territory for the international relations of which a country that is a Commonwealth country by virtue of paragraph (a) or (b) is responsible.

Definition of ``Commonwealth education or training payment'' amended by No 52 of 2004, s 3 and Sch 4 item 1, by inserting para (b)(iva) after para (b)(iv), applicable to assessments for the 2004-05 year of income and later years of income.

Definition of ``Commonwealth education or training payment'' amended by No 54 of 1999, No 45 of 1998, and inserted by No 122 of 1997.

Commonwealth labour market programmeans a program administered by the Commonwealth under which:

(a)
unemployed persons are given training in skills to improve their employment prospects; or

(b)
unemployed persons are assisted in obtaining employment or to become self-employed; or

(c)
employed persons are given training in skills and other assistance to aid them in continuing to be employed by their current employer or in obtaining other employment.

exempt income from petroleum, in relation to a taxpayer, means exempt income derived from sources out of Australia by the taxpayer from the sale of petroleum obtained from mining operations carried on by him in Australia or in Papua New Guinea or of the products of petroleum so obtained.

Definition of ``firearms surrender arrangements'' inserted by No 147 of 1997.

fishing operationsmeans:

(a)
operations relating directly to the taking or catching of fish, turtles, dugong, crustacea or oysters or other shellfish; or

(b)
pearling operations;

and includes oyster farming, but does not include whaling and also does not include operations conducted otherwise than for the purposes of a business.

forest operationsmeans the planting or tending in a plantation or forest of trees intended for felling or the felling of trees in a plantation or forest, and includes the transport by a person who has felled trees in a plantation or forest of those trees or parts of those trees from the plantation or forest to a place where they are to be first subjected to milling or processing (including processing for the production of posts, poles or railway sleepers) or to a place from which they are to be transported to such a place, but does not include operations conducted otherwise than in the course of, or for the purposes of, a business.

friendly societymeans:

(a)
the body that is a friendly society for the purposes of the
Life Insurance Act 1995
; or

(b)
a body that is registered or incorporated as a friendly society under a law of a State or Territory; or

(c)
a body that is permitted, by a law of a State or Territory, to assume or use the expression ``friendly society''; or

(d)
a body that, immediately before the date that is the transfer date for the purposes of the
Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999
, was registered or incorporated as a friendly society under a law of a State or Territory.

Definition of ``Papua New Guinea independence day'' inserted by No 80 of 1975.

pearling operationsmeans operations relating directly to the taking of pearl shell or the culture of pearls or pearl shell, and includes operations relating directly to the taking or catching of trochus, beche-de-mer or green snails, but does not include operations conducted otherwise than for the purposes of a business.

petroleummeans:

(a)
any naturally occurring hydrocarbon, whether in a gaseous, liquid or solid state;

(b)
any naturally occurring mixture of hydrocarbons, whether in a gaseous, liquid or solid state; or

(c)
any naturally occurring mixture of one or more hydrocarbons, whether in a gaseous, liquid or solid state, andone or more of the following, that is to say, hydrogen sulphide, nitrogen, helium and carbon dioxide;

and includes any petroleum as defined by paragraph (a), (b) or (c) that has been returned to a natural reservoir.

Definition of ``petroleum'' amended by No 51 of 1973 and substituted by No 87 of 1968.

Former definition inserted by No 69 of 1963.

petroleum prospecting or mining informationmeans geological, geophysical or technical information, being information that relates to the presence, absence or extent of deposits of petroleum in an area or is likely to be of assistance in determining the presence, absence or extent of such deposits in an area, and has been obtained from prospecting or mining for petroleum.

petroleum prospecting or mining rightmeans an authority, licence, permit or right under a law of the Commonwealth, a State or a Territory to prospect, explore or mine for petroleum in a particular area, or a lease under such a law by virtue of which the lessee is entitled to prospect, explore or mine for petroleum on land included in the lease, and includes an interest in such an authority, licence, permit, right or lease.

(iii)
a municipal corporation, other local governing body or public authority constituted byor under an Act or by or under a law of a State or Territory; and

(c)
securities issued in respect of a loan to a company the principal business of which is the supply and distribution, by a system of reticulation, in Australia or in a Territory, of water, gas or electricity;

but does not include:

(d)
securities referred to in paragraph (b) (not being securities to which paragraph (e) applies) issued in respect of a loan raised outside Australia and the Territories unless there is in force a declaration by the Treasurer, published in the
Gazette
, that those securities shall be public securities for the purposes of this Act; or

reportable fringe benefits amountfor a year of income in respect of an employee's employment by an employer has the same meaning as in the
Fringe Benefits Tax Assessment Act 1986
(as it applies of its own force or because of the
Fringe Benefits Tax (Application to the Commonwealth) Act 1986
).

Definition of
"
tainting amount
"
substituted by No 80 of 2006, s 3 and Sch 4 item 4, applicable in relation to transfers made into a company's share capital account after 25 May 2006. The definition formerly read:

(a)
in relation to a company (except a company in the capacity of a trustee)
-
the financial year next preceding the year of tax, or the accounting period, if any, adopted under this Act in lieu of that financial year; and

(b)
in relation to any other person:

(i)
the financial year for which income tax is levied; or

(ii)
if an accounting period is adopted under this Act in lieu of that financial year and subparagraph (iii) does not apply
-
that accounting period; or

(iii)
an accounting period that commences or ends under section
18A
, if that accounting period would (but for that section) have formed part of the financial year referred to in subparagraph (i) or the accounting period referred to in subparagraph (ii).

Definition of ``year of income'' amended by No 136 of 2002, s 3 and Sch 2 item 7, by substituting para (b), applicable to the 2002-2003 income year and later income years. Para (b) formerly read:

(b)
in relation to any other person
-
the financial year for which income tax is levied, or the accounting period, if any, adopted under this Act in lieu of that financial year;

6(1B)
[References to benefit or fringe benefit]

A reference in this Act to a benefit, or a fringe benefit, within the meaning of the
Fringe Benefits Tax Assessment Act 1986
, includes a reference to a matter or thing that would be a benefit, or a fringe benefit, as the case may be, within the meaning of that Act, if paragraphs (d) and (e) of the definition of
employer
in subsection
136(1)
of that Act were omitted.

In determining, in relation to the year of income in which Papua New Guinea independence day occurs or any subsequent year of income, whether a provident, benefit, superannuation or retirement fund was a
foreign superannuation fund
within the definition of that expression in subsection (1):

(a)
the reference in that definition to a country outside Australia shall be deemed to include a reference to Papua New Guinea;

(b)
references in that definition to a Territory shall be deemed not to include references to Papua New Guinea; and

(c)
the reference in that definition to an amount having been set aside for, or having been paid to, a fund shall be deemed not to include a reference to an amount set aside for, or paid to, a fund established in Papua New Guinea where the amount was set aside or paid before Papua New Guinea independence day.

A provident, benefit, superannuation or retirement fund does not fail to meet the requirement set out in paragraph (b) of the definition of
foreign superannuation fund
in subsection (1) merely because pensions are paid out of the fund to residents of Australia or of a Territory.

The establishment of an independent sovereign state in the territories that constituted the Territory of Papua and the Territory of New Guinea shall not be taken to affect the operation of the definition of
public securities
in subsection (1) in relation to securities issued before Papua New Guinea independence day but securities issued on or after that day shall not be taken to be public securities by reason that they are issued by a municipal corporation, other local governing body or public authority that was constituted before that day by or under the law of Papua New Guinea.

This section does not operate so as to include in the assessable income of a person any income derived before 18 September 1974 that would not have been so included if section 4 of the
Income Tax Assessment Act (No. 2) 1974
had not been enacted.

Subject to subsection (3C), this section does not operate so as to include in the assessable income of a person any income derived before 15 October 1987 that would not have been so included if section 9 of the
Taxation Laws Amendment Act 1988
had not come into operation.

This section shall be taken to have applied as if the reference in paragraph (4)(a) of this section, as in force during the period commencing when the
Petroleum (Submerged Lands) Amendment Act 1980
came into operation and ending immediately before this subsection came into operation, to the
Petroleum (Submerged Lands) Act 1967-1974
had instead been a reference to the
Petroleum (Submerged Lands) Act 1967
as in force immediately before the
Petroleum (Submerged Lands) Amendment Act 1980
came into operation.

CCH Note:

Below is material repealed as inoperative in s 6AA(4) by No 101 of 2006.

(d)
Papua New Guinea offshore area
means the sea-bed and subsoil beneath, and the space above, the waters within the areas that were specified in Schedule 2 to the
Petroleum (Submerged Lands) Act 1967-1974
as being adjacent, respectively, to the Territory of Papua and to the Territory of New Guinea, to the extent only that those waters are territorial waters or superjacent waters of the continental shelf; and

SECTION 6G
ACCRUED LEAVE TRANSFER PAYMENTS

6G(1)
Meaning of ``accrued leave transfer payment''.

For the purposes of this Act, a payment made by a taxpayer (
``payer''
) to another taxpayer (
``payee''
) is an accrued leave transfer payment if:

(a)
the payment is in respect of long service leave, annual leave, sick leave or other leave; and

(b)
the whole or a part of the leave accrued when the person to whom the leave relates was an employee of the payer; and

(c)
at the time the payment is made, the person to whom the leave relates:

(i)
has ceased, or is about to cease, to be an employee of the payer; and

(ii)
has become, or is about to become, an employee of the payee; and

(d)
the payment is made under, or for the purposes of facilitating the provisions of:

(i)
a law of the Commonwealth, a State or a Territory; or

(ii)
an award, order, determination or industrial agreement in force under any such law.

6G(2)
Extended meaning of ``employee''.

In subsection (1):

"employee"
includes a person who:

(a)
holds an office, appointment or position; or

(b)
performs functions or duties; or

(c)
engages in any work; or

(d)
does any other acts or things;

where the person accrues long service leave, annual leave, sick leave or other leave because of:

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